Are you a first-generation wealth builder? For Gen-X, this is a huge responsibility

Do you remember when you realized that you made more money than both of your parents combined?

After graduating, I started working in corporate America. The income gap was a startling realization for me as their oldest child, even though my parents were ecstatic about my career and salary. I realized that my salary was not enough to cover my living expenses, pay off debt, save for emergencies and retirement, and combine with my husband as a newly married couple in our 20s.

If my higher salary didn't assure financial confidence in me, then my parents' financial stress with lower salaries and three children must have been more dire than I thought.

I now realize that I earned the title of first-generation wealth builder before I knew it.

Defining first generation wealth

Gen-Xers are poised to realize the title of first-generation wealth builders as much as anyone else. According to the Federal Reserve, many Gen-Xers are homeowners and approaching their peak earning years, and the Pandemic has contributed to increased wealth-building opportunities.

All is not equal. A McKinsey report estimates a $330 billion disparity between Black and white families in intergenerational wealth transfers. Many Black first-generation wealth builders started with zero financial wealth with a heavy burden to save and care for the generations ahead and behind.

My college tuition, living expenses, and loans were my responsibility even though my parents were able to buy my used car. They didn't have the money to give me a down payment on a new car or home when I graduated from college. They did their best with what they had. I was determined to find out what wealth meant for me and my family and to make sure my parents were aware of it too.

Managing the responsibility of first generation wealth

As a Gen-Xer, witnessing your Silent Generation and boomer parents having more month than money as a child and young adult adds another level of intensity to breaking the cycle in your own life. The pressure to turn income to wealth often carries a great deal of weight when inheritances are not in the equation. Great responsibility comes with great achievement.

The co-founder and CEO of OnRamp Invest views his responsibility as exposing and educating his family to things he has experienced in protecting and preserving wealth.

IBM executives called older workers "dinobabies" in company emails, according to a lawsuit.

Ross wants to empower my family with ongoing resources, educational tools, and networking a financial infrastructure that will allow the wealth to remain in the family for generations to come. I feel the responsibility to prepare for what is coming and allow that to be the foundation for legacy and wealth.

Position your family for intergenerational wealth

We have outlined our goals and visions in versions four or five of our five-year plans for life and career, and worked to align them with our capabilities. We are only a decade or two from retirement, which will be here in a blink of an eye.

It is a good time to reflect on how well we are living in our first-generation wealth builder title. How can we turn the tide on wealth?

Do you have enough money left over to pay off all of your debts? The net worth calculation is a quick test to determine how well you are prepared for a major crisis.

When you use the income in your high earning years to fund a solid cushion money market account, maxing out retirement accounts to include catch-up contributions, investing in taxable accounts and possibly real estate and other investments, and aggressively paying down your mortgage, credit cards and student, your net worth In the next rounds of your 5-year plans, identify your opportunity points and take a laser focus.

You may have less money saved for retirement than you think.

Gen-Xers play a critical role as the sandwich generation, raising families while supporting our parents, so consider long-term care for parents. The burden of the Pandemic on so many families and the caretakers who have both the financial and physical capacity to support their loved ones is untold.

34% of an African-American's annual income is spent on caring for a family member, as compared to 14% of white caregivers, according to statistics. Time and money are key elements of wealth building.

If you want to support long-term care for your parents, you should get a true picture of their financial situation. Long-term care policies should be researched to prevent strain on your loved ones.

Self-care strategies should be included. It's important to find the right strategy to care for yourself and others. As my grandmother would say, "You can pour from an empty cup."

You could fill your cup in many different ways. Encourage open conversations with parents, siblings, and children regarding finances, and shared contributions of time, money, and energy.

Being a high earner and wealth-builder in your family can cause you to have unwanted feelings of fear, obligation and guilt. As we move through these strained times, be sure to fill your cup and let it overflow to your loved ones.

This investment strategy is an effective way to beat the S&P 500.

The title of first-generation wealth builder is a badge of honor when securing a legacy of wealth for generations to come.

The co-CEO and co- founder of 2050 Wealth Partners is a certified financial planner. She is passionate about increasing diversity, inclusion, equality and belonging in the financial planning profession and does so through financial planning, public speaking, writing, consulting and coaching. She was one of the Top 10 of Investopedia's 100 Top Financial Advisors in 2020 and 2021. She is on a mission to create wealth for the common good.

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